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>MDY v. Blizzard – The Court of Appeals Weighs-in
>As you may recall (and as we’ve been covering), last January, an Arizona District Court found that using MDY’s Glider bot program in conjunction with Blizzard’s World of Warcraft game software fell outside the scope of the game’s End User License Agreement (EULA). The District Court then held that MDY is responsible for players running Glider outside the scope of the EULA, and awarded Blizzard a $6.5 million judgment against MDY for copyright infringement. MDY appealed the case to the Ninth Circuit Court of Appeals, which recently issued its own decision. The Ninth Circuit overturned the District Court’s finding of copyright infringement, but nevertheless held MDY liable for breach of the EULA on a different ground – violation of the Digital Millennium Copyright Act (DMCA).The Ninth Circuit held that using Glider while playing World of Warcraft in violation of the EULA did not amount to copyright infringement. The Ninth Circuit… Continue Reading
>Chinese Agencies Feud Over Regulation of WoW
>As Chinese fans of World of Warcraft (WoW) lament the series of shutdowns ordered by the Chinese government, rival agencies continue to squabble over regulatory control of Activision Blizzard’s online gaming juggernaut. The Chinese government’s carefully crafted, buttoned-down facade belies the bureaucratic turf war currently being waged by its Ministry of Culture and its General Administration of Press and Publication (GAPP). The two agencies have been vying for control of online gaming oversight since June 2009, and there doesn’t appear to be any end in sight. World of Warcraft was launched in mainland China in 2005 and began steadily building momentum among China’s notoriously hard-to-crack gaming community. (Of the top ten online games in China, World of Warcraft is one of only three not produced in China and is the only U.S.-produced game.) Despite the steady accumulation of users (WoW China now boasts a roster of over 50 million individual… Continue Reading
>Virtual Assets, Real Money
>A favorite topic of discussion for many of the authors of this blog is virtual game worlds and virtual property. According to a recent online survey, about 10% of Americans spent real world money on virtual goods last year, the average tab being about $30. Granted, the survey results may be a bit skewed, since the participants were polled online, and thus more likely to be involved in virtual worlds and more comfortable with online transactions. However, despite its limitations, this survey adds insight to consumer spending behavior that is projected to lead to about $1 billion in sales of virtual goods worldwide this year. So, why spend real money for intangible digital items that you don’t really own? Well, the central goal of almost every player in a virtual game world is to acquire virtual assets that increase an avatar’s abilities or status within the game world. Virtual game… Continue Reading
>Tip: Contracts and the Right to Set-off
>As you may or may not have seen, Valve Corporation filed suit against Activision Blizzard, Inc. on April 28, 2009. The subject matter of the long-standing dispute is about royalties, audits, and overpayment of royalties, which brings us to today’s tip.When drafting contracts that involve the payment of royalties, consider including audit provisions and set-off provisions. Audit provisions enable a licensor/developer to verify the accuracy of royalty payments and can provide the timing, framework, and process for conducting these reviews. Without an audit provision obligating the licensee to allow the audit to happen, the only option to getting access to the appropriate books and records may be filing a lawsuit and going through the discovery process. Set-off provisions enable a licensee/payor to set-off payments (i.e., I owe you $10, but you owe me $4, so I’ll just pay you $6). Set-offs can ease administrative paperwork, while also providing better cash-flow… Continue Reading
>Blizzard v. MDY Update: $6.5 Million Judgment Stands, Appeal is Imminent
>If botting on World of Warcraft can get you a 48 hour ban, what does coding a bot and selling it to thousands of other players get you? The answer (for now) appears to be a $6.5 million dollar penalty. We’ve referenced the Blizzard v. MDY case in a few previous entries here at LiaGW. The latest ruling has come down from the Arizona District Court. As you may recall, the case went to a bench trial on the issue of damages, and the Court awarded $6.5 million to Blizzard back in January, along with a permanent injunction on the sale of Glider. After trial, Blizzard argued that under the DMCA, it was entitled to between $200 and $2,500 for each violation, so MDY should be liable for at least $24 million. MDY countered that the $6.5 million judgment should be decreased based on the “innocent violators” provision under the… Continue Reading
>Tip: File Early. File Often?
>Want to be the first to hear about a new game? Just monitor the filings at the U.S. Trademark Office. Smart game companies know that it’s important to apply to register the IP associated with a new game even though the game itself is still in secret development. Otherwise these companies risk unpleasant surprises down the road, such as someone else filing the trademark or registering the domain name. Failing to take appropriate steps to protect IP early enough can result in costly changes late in the development and marketing stages of a new game. So, who’s filing these early applications? Well, Activision-Blizzard, the publisher behind Guitar Hero, has just filed a trademark application for “Sing Hero” for “interactive video game programs.” Or, check out the newest application for “Your Game Here” from Take-Two Interactive, publisher of the Grand Theft Auto series. Their new trademark for “Your Game Here” is… Continue Reading
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